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Host Marriott to Purchase 38 Starwood Properties

Host Marriott to Purchase 38 Starwood Properties

 
Old Nov 14, 05, 8:27 am
  #1  
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Host Marriott to Purchase 38 Starwood Properties

The purchase price for the 38 Starwood properties is US$4.4 billion:

Host Marriott Agrees to Buy 38 Hotels From Starwood
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Old Nov 14, 05, 8:49 am
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Here's another article with some more info. In it it states that Starwood will continue to manage the hotels as part of the agreement. So, does this mean the these properties will continue to be giving Starpoints or will they be giving MR points?
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Old Nov 14, 05, 9:08 am
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Anyone know a list ...

...of the properties sold??
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Old Nov 14, 05, 9:13 am
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Originally Posted by DoubleJ
Here's another article with some more info. In it it states that Starwood will continue to manage the hotels as part of the agreement. So, does this mean the these properties will continue to be giving Starpoints or will they be giving MR points?

As Starwood manages a number of hotels that they do not own and provide Starpoints for those hotels, I imagine the hotels being sold will continue to provide Starpoints as Starwood will continue to manage them. Keep in mind that 'Marriott' and 'Host Marriott' are two different companies. I doubt there will be any changes in these hotels from an SPG perspective.

Last edited by beachbum; Nov 14, 05 at 9:19 am Reason: spelling
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Old Nov 14, 05, 9:16 am
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List of properties being sold:

Properties

North America
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Sheraton Location # of Rooms
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Sheraton San Diego Hotel & Marina San Diego, CA 1,044
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Sheraton Boston Hotel Boston, MA 1,216
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Sheraton New York Hotel & Towers New York, NY 1,746
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Sheraton Hotel Parsippany Parsippany, NJ 370
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Sheraton Indianapolis Indianapolis, IN 560
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Sheraton Needham Hotel Needham, MA 247
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Sheraton Centre Toronto Hotel Toronto, Ontario 1,377
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Le Centre Sheraton Hotel Montreal, Quebec 825
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Sheraton Stamford Hotel Stamford, CT 448
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Sheraton Hamilton Hotel Hamilton, Ontario 301
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Sheraton Providence Airport Hotel Providence, RI 206
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Sheraton Suites Tampa Airport Tampa, FL 259
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Sheraton Hotel Braintree Braintree, MA 374
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Sheraton Milwaukee Brookfield Hotel Brookfield, WI 389
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Sheraton Tucson Hotel & Suites Tucson, AZ 216
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Westin Location # of Rooms
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Westin Grand, D.C. Washington D.C. 263
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Westin Indianapolis Indianapolis, IN 573
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Westin Seattle Seattle, WA 891
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Westin Waltham Boston Boston, MA 346
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Westin Mission Hills Resort Rancho Mirage, CA 512
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Westin Tabor Center Denver, CO 430
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Westin Cincinnati Cincinnati, OH 456
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Westin Los Angeles Airport Los Angeles, CA 740
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Westin South Coast Plaza Costa Mesa, CA 390
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W Location # of Rooms
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W New York New York, NY 688
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W Seattle Seattle, WA 426
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St. Regis Location # of Rooms
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St. Regis Houston Houston, TX 232
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Other Location # of Rooms
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Capitol Hill Suites Washington D.C. 152
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International
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Sheraton Location # of Rooms
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Sheraton Skyline Hotel & CC London, U.K. 350
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Sheraton Warsaw Hotel & Towers Warsaw, Poland 350
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Sheraton Roma Hotel & CC Rome, Italy 634
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Sheraton Santiago Hotel & CC Santiago, Chile 379
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Sheraton Fiji Resort Nadi, Fiji 281
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Westin Royal Denarau Resort ('06) Nadi, Fiji 273
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Westin Location # of Rooms
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Westin Palace Madrid Madrid, Spain 468
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Westin Palace Milan Milan, Italy 228
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Westin Europa & Regina Venice, Italy 185
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Luxury Collection Location # of Rooms
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San Cristobal Tower Santiago, Chile 139
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Old Nov 14, 05, 9:27 am
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Originally Posted by DoubleJ
Here's another article with some more info. In it it states that Starwood will continue to manage the hotels as part of the agreement. So, does this mean the these properties will continue to be giving Starpoints or will they be giving MR points?
Host Marriott (New York Stock Exchange Ticker Symbol: HMT) is a real estate investment firm that manages not only Marriott properties, but also Hilton and Starwood properties, as well as other lodging properties. Host Marriott “split” from Marriott in 1992 and is its own entity.

Starwood Preferred Guest members should still continue to earn and redeem Starpoints at the Starwood properties owned by Host Marriott.
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Old Nov 14, 05, 9:27 am
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I am very confused with the business model here and what it means to loyalty programs. Any one have clearer picture?

As far as I can understand, there are property owners (such as Host Marriott) that cherry pick and own properties across multiple brands (Westin, Hilton. Hyatt, etc.). Does it make sense for them to let these properties compete with each other?

Then there are brand owners such as Starwood maintaining the Sheraton, Westin, et al brands by either managing such branded hotels for the property owners or franchising the brand to others who will own and manage it. Presumably these brand owners maintain the brand consistency and loyalty programs that go with it.

It would seem to me that the above two entities would be forced to either collude to reduce competition or be at odds with each other in competitive strategies.
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Old Nov 14, 05, 9:33 am
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Originally Posted by venk
I am very confused with the business model here and what it means to loyalty programs. Any one have clearer picture?

As far as I can understand, there are property owners (such as Host Marriott) that cherry pick and own properties across multiple brands (Westin, Hilton. Hyatt, etc.). Does it make sense for them to let these properties compete with each other?

Then there are brand owners such as Starwood maintaining the Sheraton, Westin, et al brands by either managing such branded hotels for the property owners or franchising the brand to others who will own and manage it. Presumably these brand owners maintain the brand consistency and loyalty programs that go with it.

It would seem to me that the above two entities would be forced to either collude to reduce competition or be at odds with each other in competitive strategies.
If I am not mistaken, brands such as Starwood and Hilton have been reducing actual ownership of real estate in favor of simply operating and maintaining the properties. Host Marriott buys the properties to actually own them for investment purposes.

I suppose this not only helps raise cash for the hotel chains, but also helps keep the cash liquid instead of having it tied up in real estate and capital improvements to properties.
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Old Nov 14, 05, 10:23 am
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Originally Posted by Canarsie
If I am not mistaken, brands such as Starwood and Hilton have been reducing actual ownership of real estate in favor of simply operating and maintaining the properties. Host Marriott buys the properties to actually own them for investment purposes.

I suppose this not only helps raise cash for the hotel chains, but also helps keep the cash liquid instead of having it tied up in real estate and capital improvements to properties.
I am not sure it is that rosy as there ain't no free lunch!

Host Marriotts of this world cherry pick and buy only the most profitable ones. Which means the remaining not so lucrative ones will be stuck with Starwood or will need to be independently owned. In either of these situations, the available investments into such marginal properties cannot be subsidized (even temporarily) by more lucrative ones as might happen if the same entity owned it. So the more profitable ones get better and the marginal ones get worse. How does Starwood intend to maintain brand consistency across such division?

Is Starwood investing the cash raised from these sales into improving properties it owns (I cannot see that happening if it is increasingly divesting itself of ownership)? May be it will get into the business of improving marginal properties with investment and selling it other Host Marriotts and that might be good for customers. But that does not seem to be a long-term business model.

The biggest problem for the consumer will be that Host Marriott owned properties may not compete aggressively with each other even if they are differently branded. For example, it makes no sense for Host Marriott to sign up to investing in offering a great new service or feature at its Hilton property that the Hilton brand is trying to promote to compete with Starwood brand if Host Marriott owns a Westin brand at a nearby location that will suffer from it.

What am I missing in this changing landscape of concentration of ownership across multiple brands?
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Old Nov 14, 05, 10:39 am
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This deal has zero impact on our ability to earn SPG benefits at these properties - it is simply a sale of real estate - who owns the building. The 'tenant' continues to be Sheraton, Westin, or whichever SPG brand was in the building to begin with. The only difference is who owns the building - SPG continues to be the tenant. You will not be able to earn Marriott points at these properties - as other posters mentioned, the company that owns and operates the Marriott hotel brand is unrelated to the company that invests in real estate. Just like I can't earn Marriott points while dining at the Sodexho Marriott cafeteria, and prisoners cannot earn points for their stays at Sodexho Marriott prisons

No one should notice any changes at all at these properties as far as earning or redeeming SPG points - the brands remains the same, and SPG still can exchange brands at these properties at their whim, such as making a Sheraton a Westin. Host Marriott does not manage the hotels or have any influence in how the hotel is operated - that remains totally upto SPG. Host Marriott just collects rent, possibly some participatory revenue, and hopes the value of the buildings will increase over time.

A good comparison is the airline business - the aircraft is owned in most cases by a capital lending company, yet operated by the airline. When you board your flight, you are on physical property that might belong to GE Capital, yet is being operated by a lessee - which is the airline flying the plane.
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Old Nov 14, 05, 10:58 am
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So, what does this mean to us and our SPG points?
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Old Nov 14, 05, 11:00 am
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Originally Posted by atwnsw2
So, what does this mean to us and our SPG points?
I'm guessing nothing. Host Marriott will own the real estate, Starwood will continue to manage the properties...what am I missing?

Sincerely,


William R. Sanders
Customer Service Coordinator
Starwood Preferred Services

[email protected]
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Old Nov 14, 05, 12:17 pm
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Host Marriott to acquire 38 hotels from Starwood

Does anyone have ideas or knowledge of which hotels are being sold. The article states 38 luxury hotels are being sold to marriott.

New markets for Marriott will include including Europe, Canada, Fiji and Chile. If Bora Bora Nui is included that will be a big loss similar to the two lost to Four Season on Lanai.

What about Chile, Canada, and Europe, any idea on the hotels being sold?

http://www.newratings.com/analyst_ne...e_1116312.html
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Old Nov 14, 05, 12:22 pm
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Host Marriott to buy 38 Starwood hotels

Looks like Starwood will continue to operate the hotels for up to 40 years. 28 of the hotels are in North America.

Link to full article:

http://abcnews.go.com/Business/wireStory?id=1310420
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Old Nov 14, 05, 12:22 pm
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I read this too today. Please confirm the following someone - Lurker?

I assume this is just an equity investment for Marriott - they're not going to rebrand them, correct? The article seems to state that but can anyone confirm?

If not rebranded and continue to be Sheraton / Westin...etc. I further assume these properties will still be in the SPG program (and not the marriott program) with all rights, rules, etc. Can somone confirm that too?

Again, I imply from the two short press release articles I read that they are not being rebranded and therefore will still by SPG program properties.

Right?
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